The upgrade centers around a 1inch Swap Engine, which is a combination of new technology and existing technology. The Swap Engine facilitates Fusion Mode, allowing users to place orders without paying network fees. 1inch Network upgrade ensures an update to staking contracts and tokenomics.
Sergej Kunz, a Co-Founder of 1inch Network, has called the release of the upgrade a huge step in the DeFi space. Sergej adds that the upgrade dramatically lowers the cost by eliminating the network fees while also adding another layer of security.
The aim highlights Sergej Kunz is to offer a smooth experience to the users of DeFi.
Fusion Mode is powered by a 1inch Swap Engine to enable users to exchange tokens on various decentralized exchanges. It further eliminates network fees to favor a decent rate for the users. Users can choose any one of the three options provided by Fusion Mode.
Fast is when the users are willing to pay a less desirable rate to have their swap executed with the first few blocks. The fair option takes a little more time to execute the order; however, it offers a more desirable rate. The starting rate may be a bit higher, but there is a chance that it eventually comes down during the execution of the transaction.
The auction takes more time, provided the users agree to wait for the maximum expiration time, which could be 10 minutes. Auction is suitable for users looking to swap assets in a larger number. It basically takes the advantage of arbitrage opportunities.
The Fusion Mode will first be active on Ethereum, BNB Chain, and Polygon. It will be activated on other networks in the days to come. What could work well for its adoption is the fact that it looks to give protection from MEV, short for Maximum Extractable Value. It often leads to a substantial loss of funds.
For instance, users of a decentralized exchange reportedly lost around $800 million in 2022 to a sandwich attack, one of the forms of MEV.
Professional traders in the Fision Mode are provided with more sophisticated tools to safeguard themselves from such attacks.
The upgrade also includes the revamping of governance and tokenomics of the 1inch Network. Users can now stake the native token for a period ranging from 1 month to 2 years. These users are granted Unicorn Power which can be used to participate in the governance.
1inch Network has also taken this opportunity to announce that its Resolver Incentive Program will run to distribute 10 million 1inch tokens as a gas refund. The maximum size of refund on a monthly basis is currently set to 1 million 1INCH tokens per resolver.